UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
              -----------------------------------------------------

                                    FORM 10-Q

(Mark One)
   x          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended June 30, 1999


              TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                 OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from __________ to __________


Commission file number 000-23953


                              OMEGA WORLDWIDE, INC.
             (Exact name of registrant as specified in its charter)



               Maryland                              38-3382537
        (State of Incorporation)         (IRS Employer Identification No.)




                 900 Victors Way, Suite 345, Ann Arbor, MI 48108
                    (Address of principal executive offices)


                                 (734) 887-0300
                     (Telephone number, including area code)


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days.

   Yes        X        No
           ---------         ---------


     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock as of June 30, 1999.


           Common Stock, $.10 par value             12,264,000
                   (Class)                      (Number of shares)


<PAGE>

                              OMEGA WORLDWIDE, INC.

                                    FORM 10-Q

                                  June 30, 1999

                                      INDEX


                                                                      Page No.
                                                                      --------
PART I     Financial Information

Item 1.    Financial Statements:

           Condensed Consolidated Balance Sheets (unaudited)
              June 30, 1999 and September 30, 1998 ..................     2

           Condensed Consolidated Statements of Operations
              (unaudited) - Three-month period ended June 30,
              1999, period from April 2, 1998 (Commencement
              of Operation) to June 30, 1998, and nine-month
              period ended June 30, 1999 ............................     3

           Condensed Consolidated Statements of Cash Flows
              (unaudited) - Nine-month period ended June 30,
              1999 and period from April 2, 1998
              (Commencement of Operation) to June 30, 1998 ..........     4

           Notes to Condensed Consolidated Financial
              Statements June 30, 1999 (unaudited) ..................     5

Item 2.    Management's Discussion and Analysis of
              Financial Condition and Results of Operations .........     9


PART II    Other Information

Item 5.    Other Information ........................................    12

Item 6.    Exhibits and Reports on Form 8-K .........................    12


<PAGE>

                         PART 1 - FINANCIAL INFORMATION

Item 1.    Financial Statements

                             OMEGA WORLDWIDE, INC.

                     CONDENSED CONSOLIDATED BALANCE SHEETS

                                 (In Thousands)

<TABLE>
<CAPTION>

                                                                           June 30,  September 30,
                                                                             1999        1998
                                                                         (Unaudited)  (See Note)
                                                                         -----------  ----------
                                     ASSETS
<S>                                                                           <C>        <C>
Current Assets:
  Cash and short-term investments ....................................   $    7,089  $  10,281
  Restricted cash ....................................................          389      9,330
  Temporary advances to Principal Healthcare
    Finance Limited ..................................................       14,805     10,477
  Other Current Assets ...............................................          979      1,956
                                                                         ---------- ----------
    Total Current Assets .............................................       23,262     32,044
Land and buildings, subject to triple-net lease,
    net of accumulated depreciation of $157 at
    September 30, 1998 ...............................................            -     27,300
Investments in and advances to Principal Healthcare
    Finance Limited ..................................................       30,011     27,425
Investments in Principal Healthcare Finance Trust ....................        6,574          -
Other assets .........................................................        6,011      2,223
                                                                         ----------  ---------
                                                                             42,596     56,948
                                                                         ----------  ---------
Total Assets .........................................................   $   65,858  $  88,992
                                                                         ==========  =========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Accounts payable and accrued expenses ..............................   $    1,774  $   1,901
  Accrued income taxes ...............................................          865        433
  Non-interest bearing deferred purchase obligation ..................            -     28,007
                                                                         ----------  ---------
    Total Current Liabilities ........................................        2,639     30,341
Deferred income taxes ................................................          306          -
                                                                         ----------  ---------
Total Liabilities ....................................................        2,945     30,341
                                                                         ----------  ---------

Shareholders' Equity:
 Preferred Stock $1.00 par value:
   Authorized 10,000 shares
   Outstanding 260 Class B shares at liquidation value................        2,600      2,600
 Common stock $.10 par value
   Authorized 50,000 shares
   Outstanding 12,264 and 12,258 shares, respectively ................        1,226      1,226
 Additional paid-in capital ..........................................       52,861     52,861
 Retained earnings ...................................................        6,572      1,955
 Accumulated other comprehensive income ..............................         (346)         9
                                                                         ----------  ---------
  Total Shareholders' Equity .........................................       62,913     58,651
                                                                         ----------  ---------
Total Liabilities and Shareholders' Equity ...........................   $   65,858  $  88,992
                                                                         ==========  =========
</TABLE>


Note - The balance  sheet at  September  30, 1998 has been  derived  from
       audited consolidated  financial statements at that date but does not
       include all of the information  and footnotes  required by generally
       accepted accounting principles for complete financial statements.


                 See notes to consolidated financial statements.

                                       2
<PAGE>

                              OMEGA WORLDWIDE, INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                   Unaudited

                    (In Thousands, Except Per Share Amounts)


<TABLE>
<CAPTION>

                                                                                               Period from
                                                                                              April 2, 1998
                                                                               Three Months   (Commencement        Nine Months
                                                                                  Ended      of Operation) to         Ended
                                                                              June 30, 1999   June 30, 1998       June 30, 1999
                                                                              -------------   -------------       -------------
<S>                                                                               <C>               <C>                 <C>
Revenues:
   Fee income - Principal Healthcare Finance Limited ......................   $  1,271          $     811         $   3,593
   Fee income - Principal Healthcare Finance Trust ........................        202                  -               202
   Interest Income:
     Principal Healthcare Finance Limited .................................      1,126                788             3,569
     Short-term investments ...............................................        117                179               588
   Rent income ............................................................          -                  -             3,908
   Other income ...........................................................         24                  -                74
                                                                              --------          ---------         ---------
                                                                                 2,740              1,778            11,934
Expenses:
  Direct costs of services provided .......................................        636                524             1,904
  General and administrative ..............................................        400                231             1,204
  Allocated expenses from Omega Healthcare Investors, Inc. ................        196                151               582
  Imputed and other interest ..............................................         85                  -             2,635
  Provision for depreciation ..............................................         13                  -               640
                                                                              --------          ---------         ---------
                                                                                 1,330                906             6,965
                                                                              --------          ---------         ---------
Earnings before equity earnings, gain on dilution and  taxes ..............      1,410                872             4,969
Equity in earnings of Principal Healthcare Finance Limited ................        309                168               760
Equity in earnings of Principal Healthcare Finance Trust ..................        280                  -               280
Equity in earnings (loss) of Essex Healthcare Corporation .................          5                  -              (366)
Gain on dilution of interest in Principal Healthcare Finance Trust ........        951                  -               951
                                                                              --------          ---------         ---------
Earnings before income taxes ..............................................      2,955              1,040             6,594
Provision for income taxes ................................................       (843)              (296)           (1,977)
                                                                              ---------         ---------         ---------
Earnings before preferred stock dividends .................................      2,112                744             4,617
Preferred stock dividends .................................................        (52)               (52)             (156)
                                                                              --------          ---------         ---------
Net earnings available to common shareholders .............................   $  2,060          $     692         $   4,461
                                                                              ========          =========         =========

Earnings per common share, Basic ..........................................   $   0.16          $    0.06         $    0.36
                                                                              ========          =========         =========
Earnings per common share, Diluted ........................................   $   0.16          $    0.06         $    0.36
                                                                              ========          =========         =========
Average shares outstanding, Basic .........................................     12,264             12,256            12,260
                                                                              ========          =========         =========
Average shares outstanding, Diluted .......................................     12,264             12,260            12,260
                                                                              ========          =========         =========
Total comprehensive income, net of taxes ..................................   $  1,765          $     824         $   4,265
                                                                              ========          =========         =========
</TABLE>

Note - The Company began operations on April 2, 1998.  Accordingly, nine months
       for the prior year are consistent with the period from April 2, 1998
       (Commencement of Operations) to June 30, 1998.


                See notes to consolidated financial statements.


                                       3
<PAGE>

                             OMEGA WORLDWIDE, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                   Unaudited

                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                                     Period from
                                                                                    April 2, 1998
                                                                      Nine Months  (Commencement of
                                                                         Ended       Operation) to
                                                                    June 30, 1999   June 30, 1998
                                                                    -------------   -------------
<S>                                                                          <C>           <C>
Operating activities:
   Net earnings ......................................................   $  4,617     $    744
   Adjustments to reconcile net earnings to cash
    provided by operating activities:
     Equity in earnings of Principal Healthcare Finance
       Limited .......................................................       (760)        (168)
     Equity in earnings of Principal Healthcare Finance
       Trust .........................................................       (280)           -
     Equity in loss of Essex Healthcare Corporation ..................        366            -
     Gain on dilution of interest in Principal Healthcare
       Finance Trust .................................................       (951)           -
     Imputed interest expense ........................................      1,146            -
     Depreciation and amortization ...................................        762           37
     Other non-cash charges ..........................................        171            -
   Payments of federal and foreign taxes .............................       (875)           -
   Net change in operating assets and liabilities ....................     (1,206)         241
   Foreign currency translation ......................................         19            -
                                                                         --------     --------
Net cash provided by operating activities ............................      3,009          854

Cash flows from financing activities:
   Proceeds from revolving warehouse facility ........................     34,502            -
   Other .............................................................       (117)           -
   Proceeds from issuance of common stock ............................          -       27,375
   Cash contributed by Omega in exchange of
     liabilities assumed .............................................          -          837
                                                                         --------     --------
Net cash provided by financing activities ............................     34,385       28,212

Cash flows from investing activities:
   Acquisition of real estate by subsidiary ..........................    (49,288)           -
   Temporary advances, net -
        Principal Healthcare Finance Limited .........................     (6,418)     (10,477)
        Principal Healthcare Finance Trust ...........................     13,631            -
   Investment in -
        Principal Healthcare Finance Trust ...........................     (1,108)           -
        Baneberry Healthcare Ltd .....................................     (1,622)           -
        Tamaris Plc stock ............................................     (2,884)           -
   Dividends from Principal Healthcare Finance
     Limited .........................................................        272            -
   Decrease (increase) in restricted cash ............................      5,831       (9,330)
   (Secured loan to) repayment of loan from
     individual ......................................................        102         (817)
   Other .............................................................        898          (61)
                                                                         --------     --------
Net cash used in investing activities ................................    (40,586)     (20,685)
                                                                         --------     --------
Increase (decrease) in cash and short-term investments ...............     (3,192)       8,381
Cash and short-term investments at beginning of period ...............     10,281            -
                                                                         --------     --------
Cash and short-term investments at June 30, 1999 and 1998 ............   $  7,089     $  8,381
                                                                         ========     ========

</TABLE>
                See notes to consolidated financial statements.

                                       4
<PAGE>

                              OMEGA WORLDWIDE, INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                    Unaudited

                                  June 30, 1999

Note A - Organization and Significant Accounting Policies

ORGANIZATION

     On April 2, 1998, the registration statement of Omega Worldwide,  Inc. (the
"Company") became effective,  and it offered 3,750,000 shares of common stock to
the public at $7.50 per share. The Company received $27,375,000, net of issuance
costs of $750,000.  Shares offered included 500,000 shares in a primary offering
and  3,250,000  shares  in a  rights  offering.  Operations  commenced  upon the
effectiveness  of the initial public offering.  Additionally,  except for $1,000
invested by Omega Healthcare Investors,  Inc. ("Omega") at the date of formation
(November 1997), there were no cash flow activities of the Company from the date
of formation to the date operations commenced.

     Immediately prior  to  the  offering  of  shares  by the  Company,  Omega
contributed  substantially all of its investment in Principal Healthcare Finance
Limited ("Principal-UK") to the Company. Assets contributed by Omega, which were
recorded  by the Company at Omega's  accounting  basis,  included a  $23,805,000
subordinated  loan to Principal-UK,  33.375% of the common stock of Principal-UK
with a carrying  value of $5,297,000,  10,556,250  warrants and other net assets
totaling  $150,000.  Omega also assigned its interest in a management  agreement
with  Principal-UK  in which  the  Company  receives  an  annual  fee of 0.9% of
Principal-UK's  assets (as defined) for providing certain advisory services.  In
exchange,  Omega received 8,500,000 shares of common stock and 260,000 shares of
Class B preferred  stock.  Of the common stock received by Omega,  approximately
5,200,000  shares  were  distributed  pro  rata  to  Omega's  shareholders,  and
approximately  2,300,000  were  sold  pursuant  to  the  Company's  registration
statement. Omega retained approximately 9.5% of the Company's common stock.

BASIS OF PRESENTATION

     The accompanying  unaudited condensed consolidated financial statements for
the Company have been prepared in accordance with generally accepted  accounting
principles for interim  financial  information and with the instructions to Form
10-Q and Article 10 of Regulation S-X.  Accordingly,  they do not include all of
the  information  and  footnotes  required  by  generally  accepted   accounting
principles for complete financial statements. In the opinion of management,  all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included.  Operating results for the three-month and
nine-month  periods ended June 30, 1999, are not  necessarily  indicative of the
results that may be expected for the year ending September 30, 1999. For further
information,  refer to the financial  statements  and  footnotes  thereto in the
Company's annual report on Form 10-K for the period ended September 30, 1998.

CONSOLIDATION AND SUBSIDIARIES

     The consolidated  financial  statements include the accounts of the Company
and  its  wholly  owned   subsidiaries   after   elimination   of  all  material
inter-company  accounts and  transactions.  Prior to April 1, 1999,  the Company
owned 100% of Principal  Healthcare  Finance Trust  ("Principal-Australia").  As
more fully  explained  in Note D and the report on 8-K dated April 1, 1999,  the
result of newly  issued  shares of  Principal-Australia  was the dilution of the
Company's ownership percentage to 47%.

     Principal-Australia's financial results prior to April 1, 1999 are included
in the Company's results on a consolidated  basis,  while  Principal-Australia's
results for the current quarter are included in the Company's  results using the
equity method of accounting.  In all periods, the results of Principal-Australia
are reported on a one-month lag basis, as  Principal-Australia  has an August 31
year end.

                                       5
<PAGE>

     Subsidiaries  that are not majority owned by the Company are reported using
the equity method of  accounting.  These results are recorded  using a one-month
lag.  Investments in publicly traded companies that do not result in the Company
exercising control (usually less than 20% ownership) are recorded at fair market
value.  Changes  in  fair  market  value  are  reflected  in  Accumulated  Other
Comprehensive Income.

Note B - Asset Concentrations

     In prior periods where Principal-Australia was reported on the consolidated
basis of accounting,  100% of the consolidated  group's real estate  investments
were owned by  Principal-Australia.  All of  Principal-Australia's  real  estate
investments  are  long-term  care  facilities  located  in  Australia.  All  the
properties  are  leased  by  Principal-Australia  to  Moran  Health  Care  Group
(Australia)  Pty Limited,  currently the largest  operator of aged care homes in
Australia.


Note C - Principal Healthcare Finance Limited (Principal-UK)

     The  following  summarizes  selected  unaudited  financial  information  of
Principal-UK  in accordance  with United States  generally  accepted  accounting
principles (in thousands):

<TABLE>
<CAPTION>


                                                  Three-Month   Three-Month    Nine-Month
                                                 Period Ended   Period Ended  Period Ended
Selected Operating Results for the periods:      May 31, 1999   May 31, 1998  May 31, 1999
                                                 ------------   ------------  ------------
<S>                                                     <C>            <C>            <C>
Revenues:
   Rent income ................................       $ 13,705       $ 12,584      $ 40,810
   Interest income ............................          1,347          1,313         4,438
   Other income ...............................              -             64            52
                                                      --------       --------      --------
       Total revenues .........................         15,052         13,961        45,300
Expenses:
   Interest expense ...........................         (9,635)        (9,426)      (29,165)
   Depreciation and amortization ..............         (2,535)        (1,869)       (7,214)
   General and administrative .................         (1,413)        (1,395)       (4,271)
                                                      --------       --------      --------
       Total expenses                                  (13,583)       (12,690)      (40,650)
                                                      --------       --------      --------
Income from operations before income taxes ....          1,469          1,271         4,650
Provision for income taxes ....................           (484)          (710)       (2,218)
                                                      --------       --------      --------
Net income from operations ....................       $    985       $    561      $  2,432
                                                      ========       ========      ========


Selected Balance Sheet Information as of:         May 31, 1999    August 31, 1998
                                                  ------------    ---------------
Investments in real estate subject to
   triple-net lease, net of depreciation ......      $ 384,475      $ 365,941
Total assets ..................................        558,206        479,541
Non-recourse debt borrowings ..................        461,532        396,282
Total liabilities .............................        542,054        464,717
Total stockholders' equity ....................         16,152         14,824

</TABLE>

     The effective tax rate is 48%, which differs from the UK tax rate
primarily because the provision for  depreciation  and  amortization is not
deductible for tax  purposes  in the  United  Kingdom.  The  Company's
proportionate  share of Principal-UK's  earnings for the three-month periods
ended May 31, 1999 and 1998 are  approximately  $329,000 and  $187,000,
respectively,  and $812,000 for the nine-month period ended May 31, 1999.
Additionally,  the Company had recorded a charge against earnings of
approximately $20,000 and $19,000 for the three-month periods  ended  May  31,
1999  and  1998,  respectively,  and  $52,000  for the nine-month period ended


                                       6
<PAGE>

May 31, 1999, representing  amortization over a ten-year period of the  excess
of the  Company's  investment  in  Principal-UK  over its proportionate  share
of Principal-UK's  underlying  equity. In January 1999, the Company received
$267,000,  representing a 5-pence annual dividend  declared by Principal-UK's
Board of Directors.

Note D - Principal Healthcare Finance Trust (Principal-Australia)

     The  following  summarizes  selected  unaudited  financial  information  of
Principal-Australia   in  accordance  with  United  States  generally   accepted
accounting principles (in thousands):

                                                   Three-Month
                                                  Period Ended
Selected Operating Results for the period:        May 31, 1999
                                                  ------------
Revenues:
   Rent income ................................       $ 2,794
   Interest income ............................           105
                                                      -------
       Total revenues .........................         2,899
Expenses:
   Interest expense ...........................        (1,493)
   Depreciation and amortization ..............          (550)
   General and administrative .................          (261)
                                                      -------
       Total expenses .........................        (2,304)
                                                      -------
Income from operations ........................       $   595
                                                      =======


Selected Balance Sheet Information as of:         May 31, 1999
                                                  ------------

Investments in real estate subject to
   triple-net lease, net of depreciation ......      $ 88,207
Total assets ..................................       109,807
Non-recourse debt borrowings ..................        76,080
Total liabilities .............................        95,102
Total unit holders' equity ....................        14,705


     As more fully  described  in the Form 8-K dated  April 1, 1999,  on April 1
Principal-Australia  sold  7,500,000  newly issued  shares to Omega and AMP Life
Limited, as well as 875,000 additional shares to the Company. Prior to dilution,
the  Company  owned  100% of  Principal-Australia.  Issuance  of the new  shares
reduced the Company's  ownership to 47% of shares  outstanding.  The transaction
created a one-time  gain on  dilution  of  interest  in  Principal-Australia  of
$951,000,  resulting in after tax earnings  available to common  shareholders of
$628,000, or $0.05 per share.


Note E - Essex Healthcare Corporation

     On April 2, 1998,  Omega  contributed  to the Company  its  holdings in the
preferred stock of Essex  Healthcare  Corporation  ("Essex"),  an  Atlanta-based
private operator of skilled nursing  facilities.  The preferred stock was valued
at  approximately  $39,000.  Essex's  primary  activities  are in Ohio, where it
operates 13 long-term care and assisted living facilities  (approximately  1,400
beds).  It also manages 32 facilities  (approximately  1,400 beds)  primarily in
Indiana.  On July 30, 1998, the Company acquired 55,000 shares of Essex's common
stock for $500,000 and converted its preferred stock into 1,940 shares of common
stock. The Company holds  approximately 47% of the outstanding  common shares of
Essex. The Company accounts for this investment using the equity method.

     The Company's  proportionate  share of Essex's earnings for the three-month
period and share of Essex's loss for the nine-month period ended May 31, 1999 is
approximately $5,000 of earnings and $366,000 of loss, respectively.

                                       7
<PAGE>

Note F - Net Earnings Per Share

     Net earnings per share is computed based on the weighted  average number of
common shares outstanding during the period.  Diluted earnings per share amounts
reflect the  dilutive  effect of stock  options (683 shares and 4,174 shares for
the three-month  periods ended June 30, 1999 and 1998,  respectively,  and 1,103
shares for the nine-month period ended June 30, 1999). The assumed conversion of
shares of preferred stock is anti-dilutive.

Note G - Credit Facilities

     In November 1998,  the Company  entered into a revolving  credit  agreement
with a bank for borrowings up to $25 million.  Omega provided a guarantee to the
banks in  consideration  of a fee of 1%, plus an annual 25 basis point  facility
fee. The  agreement is  scheduled to expire on September  30, 2000.  The Company
also pays to the banks an unused  facility  fee of 0.30%.  Borrowings  under the
facility bear interest at LIBOR plus 1.1875% or, at the Company's option, at the
prime rate. At June 30, 1999,  the Company has no outstanding  borrowings  under
the credit facility.


Note H - Related Party Transactions

     Pursuant to the  provisions of a services  agreement  between Omega and the
Company,  indirect costs  incurred by Omega,  including  compensation  of shared
executive  officers and related support  personnel,  and costs incurred by Omega
for rent, insurance, telephone, utilities, supplies, maintenance and travel, are
allocated  to the  Company  based  upon the  relationship  of  assets  under the
Company's  management to the combined total of those assets and Omega's  assets.
Assets  and costs in the  formula  are on a  one-quarter  lag  basis.  Allocated
expenses during the three-month and nine-month  periods ended June 30, 1999 were
approximately $196,000 and $582,000, respectively. Such allocations are based on
estimates and formulas that management believes to be reasonable.

     Temporary  advances  to  Principal-UK  in the  amount  of  $14,805,000  and
$10,477,000 are outstanding at June 30, 1999 and 1998. Interest on the temporary
advances is 9.25%,  paid monthly.  Interest  arising from temporary  advances to
Principal-UK is included in interest  income for the  three-month  periods ended
June 30,  1999 and  1998 is  $373,000  and  $64,000,  respectively,  and for the
nine-month  period ended June 30, 1999 is  $1,311,000.  A  subordinated  loan to
Principal-UK  in the amount of  $23,805,000  is outstanding at June 30, 1999 and
1998, respectively. Interest on the subordinated loan is 12.18% at June 30, 1999
and 11.83% at June 30,  1998,  paid  semi-annually.  Interest  arising  from the
subordinated  loan to  Principal-UK included  in  interest  income  for the
three-month  periods  ended June 30,  1999 and 1998 is  $753,000  and  $724,000,
respectively, and for the nine-month period ended June 30, 1999 is $2,258,000.

     Fees  from  services  provided  to  Principal-UK  for the  three-month  and
nine-month periods ended June 30, 1999 are $1,271,000 and $3,593,000.  Fees from
services provided to  Principal-Australia  for the three-month period ended June
30, 1999 are $202,000.

     Interest  expense  relating  to a bridge loan from Omega  totaled  $103,000
during the  three-month  period ended December 31, 1998. This loan was repaid in
full prior to December 31, 1998, and no additional interest expense was incurred
by the Company for this loan subsequent to January 1, 1999.


                                       8
<PAGE>

Item 2 - Management's Discussion and Analysis of Financial Condition and Results
           of Operations

     "Safe  Harbor"  Statements  under  the  United  States  Private  Securities
Litigation  Reform  Act of  1995.  Statements  that  are  not  historical  facts
contained in Management's Discussion and Analysis are forward-looking statements
that involve risks and  uncertainties  that could cause actual results to differ
from projected  results.  Some of the factors that could cause actual results to
differ  materially  include:  the  financial  strength of the  operators  of the
facilities  owned by the Company's  investees,  as it affects  their  continuing
ability  to meet  their  obligations  under the  terms of the lease  agreements;
changes in operators or ownership of operators;  governmental  policies relating
to  the  healthcare  industry,   including  changes  in  reimbursement   levels;
operators' continued  eligibility to participate in government sponsored payment
programs; changes in reimbursement by other third-party payors; occupancy levels
at the  facilities;  the  ability  and cost of  capital of the  Company  and its
investees;  the strength and financial  resources of  competitors of the Company
and investees to make additional real estate  investments at attractive  yields;
and the ability to obtain debt and equity at reasonable costs.

     Following  is a  discussion  and  analysis  of the  Company's  consolidated
results of operations,  financial condition and liquidity and capital resources.
The  discussion  should be read in conjunction  with the unaudited  consolidated
financial statements and accompanying footnotes.


Results of Operations

     The Company  generates  income from three primary  sources:  (1) Fee income
from providing investment advisory and management services;  (2) Interest income
from providing financing to companies in the healthcare and healthcare financing
industries;  and (3) Equity in  earnings  of  companies  in the  healthcare  and
healthcare financing industries.

Revenues
     Advisory fees are earned from Principal-UK and Principal-Australia based on
assets (as defined) under management by the Company and its subsidiaries. Assets
subject to fees from Principal-UK  increased from (British pound)220 million at
April 2, 1998 to (British pound)325 million at May 31, 1999. Equivalent U.S.
dollar amounts based on exchange  rates in effect on those dates were $367
million and $520  million, respectively.  Prior to this quarter,  fee income
from Principal-Australia  was eliminated in consolidation,  but with the
dilution of the Company's interest to 47% (see below) they are now  reported
separately.  Principal-Australia  assets under  management  for the  quarter
were approximately  A$137  million  (US$90 million).

     Interest income from  Principal-UK  has increased from prior years based on
increased advances to fund, temporarily,  acquisitions by Principal-UK. Interest
income on  short-term  investments  has  declined,  due to the  repayment of the
Company's short-term debt.

Expenses
     Direct costs of services  provided are the costs associated with generating
fee income from  Principal-UK  and  Principal-Australia.  The increase  from the
prior   year  is  due  to  the   opening   of   Omega   Australia   to   service
Principal-Australia.  The  increase in general and  administrative  expenses and
allocated  expenses  from  Omega are  reflective  of the  Company's  growth  and
increased  usage of the  services  provided by Omega.  The total of the two as a
percentage of revenues is 22% for the quarters ended June 30, 1999 and 1998.

Other
     Equity in earnings of  Principal-UK  increased from $168,000 in the quarter
ended  June 30,  1998 to  $309,000  in the most  recent  period.  The  Company's
ownership  percentage  in  Principal-UK  has remained  constant at 33.375%.  The
increase in income is due to improved  performance of Principal-UK as its leased
assets and their  rents  have  increased.  In  addition,  Principal-UK  has also
increased  net  income  by  improved  spreads.   Spreads  at  Principal-UK  (and
Principal-Australia) generally improve annually due to the escalation clauses in
each lease which are generally tied to inflation indexes, while debt is at fixed
rates.  Last  year  the  rent  increase  was  3.76%  for   Principal-UK,   while
Principal-Australia has not yet reached the one-year anniversary of its leases.

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<PAGE>

     The equity in loss of Essex of $370,000 in the six months  ending March 31,
1999 was largely  due to  non-recurring  costs  associated  with an  unfavorable
decision by a third-party  payor.  The current quarter has improved to breakeven
result.  Management  continues to make progress in structuring  operations to be
profitable under the new Medicare pay structure and in improving the performance
at the several skilled nursing  facilities  that  were  acquired  when they were
unprofitable.

     The Company has two other  investments in skilled  nursing home  operators,
both located in the UK. Investments in Baneberry Healthcare Ltd. and Tamaris Plc
represent  less than 20% of the shares  outstanding  of these  companies and are
held as  investments.  The  Company  does not  record  income or loss from these
operators,  except to the extent of dividends  received.  The investment loss of
Baneberry approximates market value. As Tamaris is traded on the London exchange
and market value information is readily available,  fluctuations in market value
are reported as adjustments to total comprehensive income.

     As more fully  described  in the Form 8-K dated  April 1, 1999,  on April 1
Principal-Australia sold 7,500,000 newly issued shares to Omega and AMP, as well
as 875,000 additional shares to the Company, diluting the Company's ownership to
47%.  The  transaction  created  the  one-time  gain on  dilution of interest in
Principal-Australia of $951 thousand,  resulting in after tax earnings available
to common shareholders of $628 thousand, or $0.05 per share.

     The Company's  effective tax rate varies from the federal statutory rate of
34% due to state taxes, tax benefits  realized from the initial formation of the
Company and the benefit of available foreign tax credits.


Liquidity and Capital Resources

     As of June 30, 1999, the Company had cash and short-term  investments of $7
million and the  availability  of $25 million under the Company's bank revolving
credit facility.  These funds are in excess of short-term operating requirements
of the Company and are  available  for further  investments  or expansion of the
Company's operations into other geographical areas.


Market Risk

     The  Company  is  exposed  to  various  market  risks.  Market  risk is the
potential loss arising from adverse changes in market interest rates and prices,
such as short-term  borrowing and foreign  currency  exchange rates. The Company
does not enter into  derivatives or other  financial  instruments for trading or
speculative purposes. The Company enters into forward foreign currency contracts
principally to hedge currency  fluctuations  in its  investments  denominated in
foreign  currencies,  thereby  limiting the Company's risk that would  otherwise
result  from  changes in  exchange  rates.  At June 30,  1999,  the  Company had
outstanding a ten-year  British pound sterling forward currency swap to exchange
BPS  20,000,000  for  $31,740,000 to mature on October 15, 2007, and a five-year
Australian dollar forward currency swap to exchange  A$15,000,000 for $9,330,000
to mature on July 3, 2003. From time to time, the Company may also obtain hedges
for its foreign currency  exposure  relative to temporary loans to Principal and
the Trust. Because of the Company's foreign exchange contracts,  its sensitivity
to foreign exchange currency exposure is considered low.

Year 2000 Implications

    The Year 2000 compliance issue concerns the inability of certain systems and
devices to properly store dates beyond  December 31, 1999.  This could result in
system failures, malfunctions or miscalculations that disrupt normal operations.
This issue affects most companies and  organizations to large and small degrees,
at least to the extent that potential exposures must be evaluated.

    The Company is  reviewing  risks with regard to the ability of the impact of
outside  vendors'  ability to  operate,  including  Omega's  services  under the
Services  Agreement,  and the impact of tenants' ability to operate.  Based upon


                                       10
<PAGE>

information  available from technology  vendors to date,  Omega does not believe
that there are issues  which  could have a  material  effect  upon its  internal
operations,  its  technology  infrastructure,  information  systems and software
applications.  In those  cases  where  there are  compliance  issues,  these are
considered to be minor in nature and remedies are already identified.
Expenditures for such remedies will not be material.

    With respect to the Company's other material  outside  vendors,  such as its
banks, the Company's assessment will cover the compliance efforts of significant
vendors, the effects of potential non-compliance, and remedies that may mitigate
or obviate such effects as to the Company's business and operations.  Based upon
its assessment of outside  vendors,  the Company does not believe that there are
issues which could have a material effect on its operations.
    With respect to the tenants and properties,  the Company's  subsidiaries and
investees are making assessments covering their tenants' compliance efforts, the
possibility of any interface difficulties or electromechanical problems relating
to compliance by material vendors, the effects of potential non-compliance,  and
remedies that may mitigate or obviate such effects.  Based upon  responses  from
tenant   surveys  to  date,   the  Company  does  not  believe  that  there  are
tenant/property-related  issues  which  could  have a material  effect  upon its
operations.
    Because  these early  evaluations  have been  conducted by the Company's own
personnel or by selected inquiries of its vendors and tenants in connection with
their routine servicing  operations,  the Company believes that its expenditures
for  assessing  Year 2000 issues,  though  difficult to quantify,  have not been
material. In addition,  the Company is not aware of any issues that will require
material expenditures by the Company in the future.

    Based upon current information,  the Company believes that the risk posed by
foreseeable  Year 2000 related  problems with internal  systems  (including both
information and non-information  systems) is minimal. Year 2000 related problems
with software  applications  and internal  operational  programs are unlikely to
cause more than minor disruptions in the Company's operations. Year 2000 related
problems at certain of its  third-party  service  providers,  such as its banks,
payroll  processor,  and  telecommunications  provider  is  marginally  greater,
though,  based on current  information,  the  Company  does not believe any such
problems would have a material effect on its operations.  For example, Year 2000
related  problems  at  such  third-party   service  providers  could  delay  the
processing of financial  transactions  and could disrupt the Company's  internal
and external communications.

    The Company  believes  that the risk posed by Year 2000 related  problems at
properties of its  subsidiaries  and investees or with its tenants is marginally
greater, though, based on current information,  the Company does not believe any
such problems would have a material effect on its operations.  Year 2000 related
problems at certain governmental agencies and third-party payers could delay the
processing  of  tenant  financial  transactions,   though,  based  upon  current
information,  the  Company  does not  believe  any such  problems  would  have a
material long-term effect on its operations. Year 2000 related problems with the
electromechanical  systems at its  properties  are  unlikely  to cause more than
minor disruptions in the Company's operations.

    The  Company  and  Omega  intend to  complete  outstanding  assessments,  to
implement  identified  remedies and to continue to monitor Year 2000 issues, and
will develop contingency plans if, and to the extent deemed, necessary. However,
based upon current  information and barring  developments,  the Company does not
anticipate  developing any  substantive  contingency  plans with respect to Year
2000  issues.  In  addition,  the  Company  has no  plans  to  seek  independent
verification or review of its assessments.

    While the Company and Omega believe that they will be Year 2000 compliant by
December 31, 1999,  there can be no assurance that the Company and Omega will be
successful  in  identifying  and assessing all  compliance  issues,  or that the
Company's  efforts to remedy all Year 2000  compliance  issues will be effective
such that they will not have a material adverse effect on the Company's business
or results of operations.



                                       11
<PAGE>

PART II -   OTHER INFORMATION

Item 5.  Other Information

        None


Item 6.  Exhibits and Reports on Form 8-K:

        (a) Exhibits - the following exhibits are filed herewith:

          Exhibit   Description
          -------   -----------

            27      Financial Data Schedule


        (b) Reports on Form 8-K:

        The following report on Form 8-K was filed since March 31, 1999:

           Current  report on Form 8-K dated April 16,  1999 with the  following
             exhibits:

                    Form of Transaction Documents
                    Subscription Deed,  Principal  Healthcare Finance Unit Trust
                    No.1 Subscription  Deed,  Principal  Healthcare Finance Unit
                    Trust  No.2  Deed of Loan,  PHF No.1 Pty  Limited,  AMP Life
                    Limited, Omega Worldwide,  Inc. Principal Healthcare Finance
                    Unit Trust No.1, Term of 2004 Options  Principal  Healthcare
                    Finance  Unit  Trust  No.2,  Term of 2004  Options  Advisory
                    Agreement



                                       12
<PAGE>

SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                             OMEGA WORLDWIDE, INC.
                                   Registrant


                                      By   /s/   ESSEL W. BAILEY, Jr.
                                           ---------------------------
                                           Essel W. Bailey, Jr.
August 2, 1999                             President and Chief Executive Officer


                                      By   /s/   EDWARD C. NOBLE
                                          ------------------------
                                           Edward C. Noble
August 2, 1999                             Chief Financial Officer


                                       13